New scheme could give vital investment boost to Llanelli small businesses

Small businesses across Llanelli could benefit from a vital investment boost thanks to a new tax incentive scheme to be introduced in April, according to a local tax specialist.

Roger Bowen who runs TaxAssist Accountants in Llanelli said: “Many start-ups and early-stage small businesses in Llanelli are desperate to raise finance to get their companies established and to fund growth plans.

“The proposed Seed Enterprise Investment Scheme (SEIS) enables qualifying businesses to raise total funds of up to £150,000 in exchange for shares. The scheme will apply to shares in companies issued on or after 6 April 2012, in the first two years following their incorporation. Eligible companies must have 25 or less employees and a maximum of £200,000 of assets.

“Qualifying small businesses will be able to attract investors with the offer of income tax relief of up to 50% on the amount they invest, provided they don’t have more than a 30% stake in the business.”

Directors are also permitted to invest in their own companies within the SEIS programme, but the scheme will not be accessible to employees. Further tax breaks may be available on any capital gains made on the shares when they are sold.

Roger added: “The SEIS will be welcomed by many local small businesses that are starved of financial support in the current economic climate.”

The plans for SEIS were announced in the 2011 Autumn Statement and legislation should be introduced in the Finance Bill 2012.

Roger also reminded any Llanelli small businesses planning to buy plant and equipment this year, such as vans and computer equipment that the annual investment allowance was to be reduced.

“Consider buying before April if you want to take advantage of 100% tax relief on purchases of plant and machinery of up to £100,000,” said Roger. “That figure reduces to £25,000 from April 2012.”